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About one half of a consumers dollar goes to pay the costs of marketing

Business Dec 25, 2020

About one half of a consumers dollar goes to pay the costs of marketing. If you could eliminate all marketing costs for a $1 package of gum: would consumers price at retail drop? Would the consumer be better off? Explain.

Expert Solution

If you could eliminate all marketing costs for a $1 package of gum without losing the benefits of that marketing, then the price at retail would drop due to competition.

Marketing is not mandatory and companies who believed it was unnecessary would be rewarded in the marketplace for eschewing marketing departments, so it indicates that there is a value gained by marketing a product over not marketing a product. This is because marketing is a way of organizing and disseminating information about what a product is to relevant parties and the value of this information translates into better returns for companies and clearer options for consumers.

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